Efficiency Gains and Savings with the Net Promoter Score
The concept of the Net Promoter Score (NPS) was first published in 2003 in an article called, One Number You Need to Grow. It was created as a way to measure and manage customer loyalty without the complexity of traditional customer surveys. Since that time, the same concept has been applied in multiple functional areas to replace longer surveys that require too much of a participant’s time.
What’s Wrong with a Longer Survey?
To put things in perspective, imagine that you work for a large company. HR wants to gather detailed employee opinions with their survey. Marketing wants to gather detailed information too. Next comes IT and other functional areas. What I’ve witnessed happening is that there are so many long surveys all being directed at the employee base that employees become numb to them. They’d love to give you their opinions but their inbox is filling up with surveys, each requiring 30 minutes each. The end result is that employees answer very few of them. In these companies, it sometimes becomes necessary to have one group, usually the Legal team, determine which surveys go out when. In that case, your Operations and Sales departments win.
[Side note: Why the Legal team? Because they have a vested interest in ensuring you don’t ask employees questions that you aren’t supposed to ask.]
The benefits of using the NPS metric are many:
- Shorter surveys tend to receive higher response rates,
- Using resources to deep-dive long survey results is not an efficient use of time when “all is well,” and
- Setting up and reviewing the results of an NPS metric are quick and easy.
Where Have We Seen the NPS Applied?
The NPS score lends itself well to measurement in service-based departments like Human Resources, Finance, Legal, Accounting, Procurement / Supply Chain, Sales and Marketing. These are areas that provide service to internal or external customers.
Let’s start with Human Resource departments that typically run an annual engagement survey. I have seen first-hand in large, global companies that this survey can consume multiple weeks of a team’s time as they set up the survey, execute it and then distribute the results to each manager. Add to that cost the fact that most engagement surveys are being run using a 3rd party vendor tool. In global companies, this can be hugely expensive.
[Side note: Annual surveys are being replaced with pulsed surveys to smooth out temporary impacts to the results.]
Instead, why not put that long survey temporarily on the shelf and try the NPS metric. The NPS question in HR would be “How likely are you to recommend our company to friends and family as a place of employment?” You can also add “How likely are you to recommend our products and/or services to friends and family?”
Why put the longer survey on hold? You only need the deep dive when you see your NPS score start to trend downward. Only then is the more detailed survey needed to get a hint as to the root cause of a falling NPS. If the NPS is stable or rising, why not save some money and dedicate those resources to something with a greater need?
To transition over to the NPS measure in Human Resources, be sure to compare the first execution of your NPS survey to the latest results you have from your longer survey. You want to see consistent results. If the last time you ran your longer survey was more than 6 months ago, you may wish to run the NPS and longer survey in parallel to test for consistency. If the results are consistent, you can drop the longer survey and monitor your NPS.
Because the NPS metric is quick to execute and monitor, it lends itself well to more frequent measurement using randomly selecting participants each month.
Supply Chain & Procurement
Supply chain and procurement teams are also a service-based area of an organization. Essentially, they serve the core of the company by providing parts, products and supplies to other areas of the company. In manufacturing organizations, they are key in providing parts to the manufacturing floor.
For supply chain, service can be split into two parts. There is the service level that the team members provide to the company and there is the service that suppliers provide to the company. For service levels provided by suppliers, the important factors are cost, quality and timing (of deliveries). Implementing the concept of a net promoter score in supply chain would require one question to measure the service of the supply chain / procurement staff and a question aligned to each supplier. The supplier’s score should be communicated back to the supplier with any low scores investigated in order to provide actionable details for improvement.
IT is another area that services internal customers. Like Supply Chain and Procurement, the service levels can be divided into two pieces: the service levels provided by members of the IT team and the tools that are provided to employees to use. I separate these two because there are situations where your IT staff provide excellent service, but circumstances beyond their control (budget, decision-making authority) can yield a lower score of the tools that employees must use.
Legal and Marketing
The Legal team can be viewed in two ways. In smaller companies, one NPS measurement will be enough since it is likely that only one or two Legal professionals are in place. In larger companies that possess quite a few lawyers, the service level can be measured in two pieces similar to what was described for the IT team. One measurement is of the team members and one is for the tools Legal provides for employees to use. One example of a tool many larger Legal teams provide to employees is a self-service portal for generating standardized non-disclosure agreements.
Marketing is also similar to Supply Chain in that you would wish to measure the service provided by the team members and the service provided by any third-party providers of outside marketing services.
Efficiency Gains and Savings
Particularly in larger companies, the potential burden on employees receiving internal surveys can be substantial and a streamlined approach to information gathering can be greatly beneficial. With a bit of thought, an NPS type of metric can replace longer surveys in many business areas. With this concept, a company can save both money and time by reserving longer surveys for the areas that show a reduced NPS score. Sometimes less data is more.
Tracey Smith is a recognized analytics expert, speaker and author. She is the President of Numerical Insights LLC, a boutique analytics firm addressing the needs of businesses large and small. If you would like to learn more, please visit www.numericalinsights.com or contact Tracey Smith through LinkedIn.